Why Soleno Therapeutics (SLNO) Is Down 29.0% After VYKAT XR Launch Raises Safety and Legal Concerns

• Soleno Therapeutics recently announced third quarter 2025 earnings, reporting net income of US$26.01 million after a net loss of US$76.62 million a year ago, and discussing the commercial launch of VYKAT XR, its FDA-approved treatment for hyperphagia in Prader-Willi syndrome.
• While financial results were strong, the company’s update sparked concerns about VYKAT XR’s launch trajectory, discontinuation rates due to adverse events, and increased scrutiny following short seller reports and legal investigations.
• We’ll look at how heightened attention on safety-related discontinuations for VYKAT XR is influencing Soleno’s investment narrative going forward.

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What Is Soleno Therapeutics' Investment Narrative?

Owning shares in Soleno Therapeutics right now means believing in the future of VYKAT XR and its commercial success in treating hyperphagia in Prader-Willi syndrome. The company’s turnaround to profitability this quarter stands out, but the sharp share price decline after earnings reveals a shift in what really drives sentiment: investors are now laser-focused on the sustainability of VYKAT XR’s launch and the safety profile, not just the top-line growth. Catalysts like expanded payer coverage, greater prescriber uptake, and progress with European regulators are still critical, but recent questions around discontinuations and the short seller-driven legal investigations have injected new risks. If launch headwinds prove persistent, near-term growth could be less robust than previously expected and the path to sustainable profitability shakier.
However, the recent spike in discontinuation rates is a fresh risk investors should track.

Despite retreating, Soleno Therapeutics' shares might still be trading above their fair value and there could be some more downside. Discover how much.

Exploring Other Perspectives

Three individual fair value estimates from the Simply Wall St Community range from US$45.57 to a very large US$455.73, highlighting dramatically different expectations. With new safety concerns now taking center stage, opinion gaps could widen even further as investors react to evolving risks and catalysts.

Explore 3 other fair value estimates on Soleno Therapeutics - why the stock might be worth over 9x more than the current price!

Build Your Own Soleno Therapeutics Narrative

Disagree with this assessment? Create your own narrative in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Soleno Therapeutics research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.
• Our free Soleno Therapeutics research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Soleno Therapeutics' overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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